On Saturday June 3rd, the Board of Directors presided at the water company’s Annual Shareholder meeting. I would like to thank all of you who attended. There were two primary presenters: Dave Hicks the General Manager and Tom Schneider, Board Treasurer and Chair of the Long‐Range Planning Committee [LRPC]. Their combined message was clearly future focused as to the path the water company will be following over the next 2‐5 years.

Dave covered the continued need to repair and replace aging infrastructure focusing on the replacement of 1960/70 era piping, and the need to upgrade our Water Treatment Plant. He reiterated the ever‐present plan to install new electronic water meters, while reminding all that there is existing State Law requiring such. He spoke of the movement of older supply pipe lines from the rear of a number of properties out into the Utility Right‐of‐Way. This will allow the installation of fire hydrants, which are clearly needed in many areas. There was no thought of hydrants in the early phases of construction in the 1960s. Dave went on to say that he believed that construction will begin in early 2018 and that the water company is in the process of preparing for such.

The construction phase is a continuing effort from the mid‐2000s when the replacement of the older infrastructure began. The program in place was intentionally placed on hold in 2012 and a necessary search for additional water sources began. As you recall, most of those places tested for water were a complete bust. Many years were spent on the search and eventually two well sites were developed. One site is actively involved in water supply and the other is on hold, assigned to deploy in the event of an emergency. In November of 2015, we signed a contract with CCWD for the purchase of treated water and that contract remains strong. Tom Schneider then explained how the future repair, replacement, up grading and expansion into the utility right‐of‐way was going to be implemented and how it is going to be funded.

In late 2016, the water company was awarded a $12.23M loan, after a multi‐year application process for infrastructure repair, up‐dating, including completion of the meter program and replacement of all old equipment and system components. Tom described the loan process and announced that the water company was successful in negotiating an annual interest rate at 1.875%. This is a 40‐year loan and the first payment will be due in 2019, one year AFTER the construction has begun. The annual cost of shareholders fees/water fees for every homeowner, according to Tom, will remain at present levels. The portion of the homeowner’s annual payment that currently covers: construction, infrastructure repair and the like is being replaced by the loan.

Continuing into 2017, the LRPC had been tracking a group of metered homes that house both full and part‐time residents, for the purpose of studying average monthly consumption.

We will be phasing into a revised payment schedule that will be based on:

  • The Base Rate or meter charge.
  • The consumption of the household based upon a yet to be determined.
  • Threshold, an amount stated in cubic feet/fixed period (Probably two months), with a tiered application: The more one uses the higher the fixed period cost.
  • The individual’s share/cost of the USDA loan.

The base rate charge is designed to cover the operational costs of the water company and covers all costs associated to the overall expense of water delivery. This charge does not cover that portion that is funded by the loan. Consumption rate is reflective of usage: the more you use the more your pay. The loan will cover all repairs, inventory/equipment, etc. connected to the overall reconstruction. You will find the link on our home page. One of the requirements of the loan is to hire a “loan manager” and we are in the process of doing so. I would encourage you to go onto our website: www.blsmwc.com and review Tom’s presentation.

Thanks to the work efforts of staff and board, we authored a Request for Proposal (RFP) and sent it out to engineering firms that are in this type of field. Three responses have been received and a search committee will be delivering their recommendation to the Board at a Special (teleconference) Meeting to be held on Monday, June 12th at 1:30pm. For shareholders wishing to attend the Board teleconference, the meeting will be held at the BLSMWC office at 1011 Blagen Road, Arnold. Once affirmed, the selected company will be put to work in handling the loan’s complexities. (This process and selection are loan requirements. The loan structure is designed to cover all associated costs).

Tom concluded his presentation and the remainder of the time was devoted to question/answers. One question had to do with contacting the property owner during the construction process. As we move into a neighborhood, our intention is to get ahold of any affected property owners. There are some minor complexities associated with water line movement and meter installs. For example, the water company’s utility obligation is to bring water access to your property. We will do so. The matching obligation to get the water flow to your residence resides with the property owner, not the water company. If there is an existing water line forwarding from the utility right‐of‐way, only a meter maybe needed and no other work will be necessary. We will be talking more and more about this matter as the construction begins.

A comment about the Bark Beetle. We continue to receive calls re: watering trees as a deterrent to the critter. We have checked repeatedly with UC Davis over this matter. I would best describe our continued position by asking: Have you every seen a sprinkler system in the forest? Please continue to refrain from this practice. When in doubt refer to our Drought information on the website.

If you attended the meeting on June 3rd, you were given a great look into our future.

Since we are going to travel this path together, I can promise you that you will enjoy the ride.

Bob Maginnis
BLSMWC
Board President

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